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Bill Summary · HB 1073

Summary of HB 1073 (2025 Session) — Fair Share for Public Schools Act (North Carolina)

Proposed by: Representative Buansi (with several co-sponsors)

Effective date: Taxable years beginning on or after January 1, 2026

Status: Filed April 28, 2026

Purpose and intent
- To impose a new 7% income tax rate on high-income North Carolinians (income exceeding $1,000,000 per year) and to dedicate the resulting revenue to the State Public School Fund.
- The goal is to provide additional funding for public schools, distributed to local school administrative units on a per-pupil basis, in accordance with constitutional provisions directing funds to the State Public School Fund and local districts.

Key provisions

1) High-income tax rate
- Creates a new tax rate:
- For North Carolina taxable income exceeding $1,000,000 in a tax year, the rate is 7%.
- This rate applies to the portion of income above $1,000,000 and does not allow for any rate reduction trigger under subsection (a1) for this bracket.
- The 7% tax on income over $1 million is in addition to the existing tax structure for other income levels.

2) Allocation of revenue
- Annually, the taxes collected under the 7% high-income bracket (plus any specified deductions) are to be distributed to the State Public School Fund.
- Distribution is for allotment by the State Board of Education, on behalf of the counties, to local school administrative units on a per-pupil basis.
- The distribution mechanism is intended to be in accordance with Article IX, Section 7(b) of the North Carolina Constitution.
- The Department of Revenue may retain up to $100,000 per year to cover administrative costs (cost of collection).

3) Administration and timing
- The Secretary of Revenue is responsible for distributing the new revenue to the State Public School Fund.
- Administrative expenses for collection are capped at $100,000 annually.
- The new high-income tax applies to taxable years beginning in 2026 and thereafter.

Who is affected

  • Taxpayers with North Carolina taxable income exceeding $1,000,000 in a given year will incur an additional 7% tax on the amount over $1,000,000.
  • State Public School Fund and local school administrative units will receive increased funding, allocated on a per-pupil basis, to support public education.
  • The Department of Revenue and the State Board of Education oversee collection and allocation, respectively, with the per-pupil distribution to local districts.

Significant procedural or timeline aspects

  • Effective for taxable years starting January 1, 2026.
  • Annual distribution to the State Public School Fund occurs each year, with per-pupil allocations to local districts.
  • Administrative costs of collection are explicitly limited ($100,000 per year).

Notes for readers

  • This bill creates a new targeted wealth-tax component aimed specifically at high-income residents to bolster public school funding.
  • Details on the calculation of “North Carolina taxable income” and interplay with other deductions or credits follow the general framework of the state individual income tax, but the high-income bracket is taxed at a flat 7% above $1,000,000.
  • The per-pupil distribution formula is tied to constitutional guidance (Article IX, Section 7(b)) and would determine how funds reach school units.

If you’d like, I can provide a concise one-page briefing or a side-by-side comparison with the current NC tax structure.

Compiled from official sources — confirm details with the bill’s official record.

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